I wish to first say that I was terribly skeptical that the war would amount to ANY economic benefit to either the U.S., Iraq, or the world. I've had frequent debates amongst my close group of friends as to the merits of the war. But, based on information that I obtained, I can safely say that this war WILL pay dividends. Whether those dividends actually offset the cost of the war remains yet to be seen.
Over the last few days, the Iraqi Government has held auctions regarding the rights to develop certain properties. According to Al Jazeera, the bidders included 45 separate entities vying for 15 oil fields.
The bidders included Exxon-Mobil, British Petroleum, Italy's Eni spA, Occidental Petroleum, a joint venture between Anglo-Dutch Shell and Malaysia's state owned Petronas, France's Total, Angola's firm Sonangol, and the Chinese-owned CNPC. Quite a list, wouldn't you say?
The winning bidders were the joint venture between Shell and Malaysia's Sonangal and China's CNPC. The Shell-Petronas combination was the winner for the Majnoon field, containing 18 billion barrels in proven reserves, the largest property up for development! China was awarded rights to the Halifya field. Both of these properties are considered to be within areas believed to be fairly stable.
According to the Christian Science Monitor, some fields attracted no bids at all, as they are situated in places involving ongoing internal conflicts with the Kurds. Other fields recieved a single bid, but were rejected as the remuneration sought was too high. As a result, the Iraqi Government said it would develop those fields itself. East Baghdad recieved no bids at all, despite having proven reserves of more than 8 billion barrels!
If all goes as planned, Iraq's oil production will TRIPLE within the next 7 years to 10 million barrels a day, which would probably put it, by that time, as the world's LARGEST producer! Some skeptics suggest that the goals are unrealistic, but they are still confident that production will top at 6 million barrels per day, which would place Iraq amongst the very largest producers. Currently, the entire world produces 85 million barrels per day, which is declining, so this development is quite extraordinary.
I hope you find this informative and interesting. Whether you find it useful, is another story altogether, unless, of course, you're now kicking yourself for NOT being part of the bidding process! If you have any comments, pro or con, please submit them in the comments section below.